Case Study Of Public-Private Partnership Financing Model Of Oriental Landscape

In the context of China’s sustained and rapid economic development,the quality of life of the people has been steadily improved,and the country’s public service infrastructure is also under vigorous development.In order to encourage social organizations to participate in construction projects,solve problems such as insufficient infrastructure construction caused by lack of government funds,and reduce financial pressure brought by public infrastructure to local governments,China proposes to promote the implementation of PPP model.The introduction of PPP mode can help the government alleviate financial pressure and expand the use scope of government funds.Social capital can also share the risks and responsibilities that may be faced by the project through the cooperation mechanism with the government to help enterprises optimize their resources and improve efficiency.This model is not only conducive to economic development,but also helps to make up for the shortage of supply in relevant fields in the urbanization process,promote the coordinated development between cities,and promote the sustainable development of ecological environment.However,in order to better enhance the confidence of social capital to participate in the project construction and further implement the PPP model,we should first solve the problem of project funding.So this article in combing the PPP model on the basis of the related concepts and theories,to the Oriental landscape company as an example,the research company in the PPP project life cycle to take the advantages and disadvantages of the financing way of,and the results are briefly,in order to bring more enterprise applications in the PPP mode on some inspiration and advice,as far as possible avoid risk happened in the process of application of PPP model.It is hoped that more social capital can be invested in PPP projects to promote the rapid development of national infrastructure and other aspects.After research found that,unlike from other companies undertaking PPP projects,Oriental landscape aims to transform from traditional landscape construction projects to large-scale construction of PPP projects.Therefore,it does not only carry out project financing for a certain project,but selects different financing methods according to each stage of the project life cycle.Firstly,during the project identification period,the company chooses to set up a large number of ecological and environmental protection PPP funds to prepare for the project capital,and at the same time,defines the project areas to be undertaken.Secondly,during the establishment period of the project,cooperate with the government and other social capital parties and establish PPP project companies according to law,so as to absorb the capital of the partners to supplement the investment of project capital and share the capital pressure and project risk.Finally,in the project after the establishment,the company mainly by the project company loan to the bank to get money,not all items will be within the scope of company included in the consolidated financial statements,a project company is easier to get bank loans for a long time,the second is to a certain extent,optimize the financial statements,avoid high assets liabilities further transformation affect the company’s future development.Financing in accordance with different stages of the project can not only meet the capital needs of each stage of the project,but also further realize the implementation of PPP mode.Due to the late proposal of PPP mode in China,there is not much experience to learn from.Oriental landscape company has made sufficient fund preparation in the early stage of project construction,but neglected that the project also needs the guarantee of fund during the operation period.At the same time,although after the establishment of the project,Oriental landscape company realized the capital raising and risk sharing through bank loans from various project companies,as the controlling shareholder of the project company and the contractor of the project,they neglected the overall risk control and chose short-term financing bonds to increase their debt repayment pressure.When the project company needs funds,but the controlling shareholder is unable to provide timely help,it will directly affect the progress of the company and even lead to the shutdown of the project.As the contractor,if the risk of high capital,will also affect the company’s credit can not undertake the normal operation of the project.So this article suggested that application of PPP model for business development of enterprise needs to control risk on the premise of rational choice on the comprehensive financing way,you can refer to the Oriental landscape company according to the different phases of project project financing this way,but you can’t just beginning to undertake and construction projects in the project only pay attention to the choice of the financing way,more important is to focus on the project of the overall situation,to ensure that the PPP project completion.